A surge in US soybean prices in the cash markets and rising barge freight has led to China delaying shipment of at least two cargoes and other buyers could likely follow, grain traders said on Wednesday.
The rise in basis values comes amid sustained slow farmer selling despite their having harvested 80 percent of a soybean crop forecast by the US Agriculture Department at a record large 3.1 billion bushels (84.6 million tonnes) this year.
A trader said there were also concerns that some of the export demand could be diverted to Brazil, the world's second largest soy producer after the United States, at a time when the South American nation is usually not competitive.
"South American farmers have been selling beans this week. They are almost competitive again. You've got to be a little bit careful...they could pick up one or two cargoes," he said.
The United States seasonally dominates the global soybean export market between September and early January, after which cheaper supplies from Brazil and Argentina become available.
Traders said China, the world's top soybean importer and the No 1 market for supplies from the United States, has pushed back the shipment of at least two Panamax-size cargoes of about 60,000 tonnes each from October or first-half November to last-half November.
"We've got high barge freight, and farmers are not selling any beans. By rolling its shipments, China was able to save a few cents per bushel," a trader said.
If the November shipments were cheaper by just 5 cents a bushel, the Chinese buyers would be able to save about $110,000 for each of the two vessels, traders said.
Another trader said China's decision to delay shipment was also linked to a decline in the profitability of crushing soybeans into soyoil and soymeal in the country.
Traders said two exporters believed to have sold the soy cargoes to China were selling soybeans for October shipment in the CIF barge market, which supplies US Gulf elevators.
The selling, coupled with a pullback in demand, saw soybean basis values in the CIF market slump early on Wednesday. October bids fell 8 cents a bushel, and offers fell 10 cents.
Comparatively, November soybean basis bids were holding at 55 cents a bushel premium the CBOT November contract, while offers were down 2 cent at a premium of 60 cents.
Traders said barge freight on rivers moving grain to export elevators have been rising since Friday on stepped up movement by both farmers, and elevators running out of storage space.
The US corn harvest was 55 percent complete by Sunday, with production this year forecast by the USDA at a record-large 11.6 billion bushels (295 million tonnes).
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